By Frank Treanor Business Strategy IT & Technology Thought Leadership 25th October 2016

Talking ‘Bout My Generation

Generation Z talent is now entering the workforce and the Gen X-ers, who are now the captains of industry, desperately need them as employees if they want their companies to thrive. Unfortunately growing a beard and wearing skinny jeans to work ain’t enough – you need to make deeper changes or they won’t willingly come anywhere near you.

(Note: For the uninitiated, Gen Z are the post-millennium generation… your latest trainees and graduates)

In many corporations today, you could imagine walking through brightly coloured corridors, past inviting open doors, from which excited voices, LED lights and the rumble of innovation emanate. Then you come to a dusty closed frame, hiding a slightly musty odour and the occasional sound of a Texas Instruments Scientific Calculator being used. The sign on that door says ‘Procurement Department’ but it may as well say ‘Keep Out’.

It’s time we stopped snoozing and started attracting lively Zs

There is a deep irony at play here because procurement’s obsession with cost-cutting is the very thing which is costing it so many valuable opportunities. While procurement is still populated by a generation caught up in the cycle of meeting budgets, getting the lowest price and squeezing suppliers (often with a blind-eye to service), it will never change. At its highest level, CPO’s increasingly talk about moving the procurement agenda to value-creation and supply chain innovation, but unless they can change the fundamental assumptions of procurement’s role which are ingrained within the fabric of their businesses, they don’t stand a chance.

The loop needs to be broken somewhere, somehow! The full irony is well represented by the following example of how new companies are beating larger, established companies at their own game by focusing on agility, communication, and self-responsibility.

A traditional procurement team receives a request from their sales team to find suppliers for new packaging and a retail display for a major expansion-opportunity with a key national account. Procurement insist on more information from the key account manager which creates frustration, and then embark on a convoluted sourcing exercise with approved suppliers – using the company’s rigid processes and sourcing tools. Progress isn’t shared with the sales team and eventually the sales opportunity is lost to a new upstart competitor.

The upstart competitor is unencumbered by inter-departmental false-walls, and “must-use” procurement systems. They’ve invested in procurement training for their Gen Z graduates and encourage them to work using agile practises learnt from software teams. When the request comes in from Sales, it seamlessly flows into Procurement because they work so closely. Procurement use open, inexpensive applications to post the requirements to suppliers, with the key account manager having full visibility. Close cooperation between sales, procurement, and the supply chain leads to innovative solutions which are shared instantly with a delighted key customer  –the deal is done and the company takes market share from the competitor.

It’s not honey that ‘attracts’ bees – It’s their job to ‘make’ it!

Established companies need to wake up and smell the roses. Unless they are prepared to change deep set board-room assumptions that procurement’s focus should fundamentally be on cost-reduction, they will never attract the very people that can facilitate the change it needs. Until that happens, the brightest, most innovative and enthusiastic young talent (Generation Z) will always walk past their door and go to the businesses which encourage agility and self-responsibility.Giving every new starter an ipad is simply window-dressing. Recognise that Gen Z aren’t going to be comfortable sat behind a PC following working practises that don’t mirror how they communicate outside of work. Gen Z are creative and worthy – they want to change the world.

As a member of Generation X myself (born in the 60s or 70s), I totally understand the old-school mindset and see it among my peers at every business conference I’ve ever attended. The problem is very real.

I recently met a CPO of a cosmetics company who, on the one hand wants to encourage supply-chain innovation, but on the other hand won’t allow his teams to use any agile, category-specific technology while they are implementing a corporate P2P solution – which happens to be way behind schedule, over-budget, and doesn’t support complex categories like point-of-sale and capex. His next generation of trade-marketers and procurement are going to be using emails and spreadsheets for some time to come – and that simply won’t cut-it with Gen Z.

Yes, a big part of the problem is the second tier status that CPO’s have, compared to CEOs and CFOs, but they also need to take a good look their investment decisions and rigid processes which sometimes defeat their own agendas.

Change is hard in any organisation, but, if talent drives success, then many of today’s large companies, not just their procurement departments, will continue to decline if they don’t start to embrace the changes that Gen Z expect.

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